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Tax audit u/s 44AB

nandkishore (student) (54 Points)

20 May 2011

Mr. X's turnover for the previous year 2010-11 is Rs 21, 00, 000/-. However he claims that his total income chargeable to tax is Rs. 158000/- . Is he liable to keep and maintain such books of accounts as specified in section 44AA & get his accounts audited u/s 44AB.

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10 Replies

Amit Raj (I.T. Practitioner) (67 Points)
Replied 20 May 2011

Yes. As in the above case, sec 44AD is applicable and the Net income is below 8% of total turnover. if the income is or more than Rs. 1,68,000/- tax audit is not required.

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CA ADITYA SHARMA (CA IN PRACTICE ) (16719 Points)
Replied 20 May 2011

agree with above reply

M. N. JHA (CA) (8316 Points)
Replied 20 May 2011

Yes, he need to maintaine book of account and required tax audit.

Hitesh Jogani (CA Final...!!) (190 Points)
Replied 20 May 2011

yes he do need to maintain the books of account...

PEACE...!!!

Vivek Mehta (CA, DISA,CS, MBA) (I am in Practice and also giving understanding and guidance to the Students of CA Final and IPCC for various subjects esp for Direct Tax.) (1629 Points)
Replied 20 May 2011

Yes Section 44AD will apply it this case...but one need to check that whether the business is of retail or any service provding or or a wholesale one in the first case audit will be required for declaring the income bellow 1.68 lacs but in the other two cases the same is not applicable...so in similar way check the nature of business that whether it qualifies for the sec 44AD or not

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sanjeev (student CA CS) (295 Points)
Replied 22 May 2011

ya he should required to maitaian under section 44AA , exceeds 1000000 turnover

KIYOSH (TAX CONSULTANT) (332 Points)
Replied 22 May 2011

yes he need to maintain books & get it audit

CA. ANKUR JAIN (CA.....) (2800 Points)
Replied 22 May 2011

HE NEED NOT TO MAINTAIN BOOKS OF AC AND GET THEM AUDITED SINCE SECTIONN 44AD PROVIDES THAT if you claim the lower income(i.e less then 8%) but your income doesnt exceeds the income not chargable to tax(i.e 160000) then u need not to get your account audited.

Vishnu Dutt Sharma (Accounts Manager) (22 Points)
Replied 22 May 2011

Yes, in the above case, sec 44AD is applicable and the Net income is below 8% of total turnover. if the income is or more than Rs. 1,68,000/- tax audit is not required.

Pratik (Audit Executive) (21 Points)
Replied 23 May 2011

In the given case, Mr.X does not exceeds the threshold limit of Rs.60lakhs therfor he is not require to do tax audit. However assessee can opt special provision laid down u/s.44AD and if he justify his income below 8% of his turnover then he has to maintain the books of accounts and get it audited.

Let me explain through an example for the above situation.

Mr.X is having Rs.21 Lakh turnover. As per Sec.44AD his income will be considered as Rs.168000/- (i.e. 8% of Rs.21 Lakh). however, if Mr.X is claiming that his income is below Rs.168000/- then he has to maintain necessary books of accounts and get it audited.